Setup for states’ health insurance exchanges is massive job with crucial deadline
By Sarah Kliff,
Oregon’s health insurance exchange needs a 150-person call center. Maryland’s wants a public relations agency. And the Colorado exchange seeks something even more basic: a name.
“In a few weeks, we might know,” said Patty Fontneau, executive director of what is now called the Colorado Health Benefit Exchange. Fontneau doesn’t want to use the bulky name; she wants one that “responds to what customers are looking for.”
The Obama administration this past week gave eight states and the District of Columbia conditional approval to operate health insurance exchanges, the online marketplaces where consumers will use federal subsidies to purchase insurance policies.
The designation recognizes that these states have made enough progress to hit a crucial deadline: launching for open enrollment on Oct. 1, 2013. The exchanges will also need to begin collecting subsidies in January 2014.
Most states have opted not to take full control of their insurance exchanges; the consulting firm Avalere Health estimates that 32 states will leave it to the federal government to run their marketplaces or work in partnership, taking on select responsibilities.
“From where we started, we have a lot fewer operating their own exchanges than we had anticipated or hoped for,” said Avalere Health Director Caroline Pearson.
Most consider the health exchanges a crucial part of the health-care law, with Americans projected to spend $23 billion in federal subsidies through the exchanges in 2014. The Obama administration has distributed more than $2 billion in exchange-planning grants to states.
Officials in the states that did receive approval this past week to run their own health insurance exchanges describe the effort as a huge undertaking, with much work still to be done.
“With all of the work we’ve already done, that clearly puts us on pace to execute,” said Jason Madrak, communications and marketing director for the Connecticut Health Insurance Exchange, which received its federal approval Monday. “Now it’s a massive, nine-month sprint to actually build the infrastructure.”
States must build Web sites that will tell consumers whether they are eligible for subsidized coverage and detail the cost of a plan’s premiums, based on factors such as age and sex. They must also create consumer support programs to work with Americans who might be purchasing insurance coverage for the first time.
In order to gain approval, the states submitted lengthy blueprints detailing how they would build their exchanges, some upwards of 800 pages.
Officials in Oregon have had consumers and small-business representatives come into their offices to test out a rough version of their Web site, tracking the points where they got stuck or confused.
“We have people sitting behind them, watching where they hover with their mouse,” said Rocky King, executive director of Cover Oregon. “We’re also filming from the computer screen so we can watch their eye movements. When people get stuck, we know exactly where they are.”
King has also worked on outreach to insurance carriers that he hopes will sign up to sell on the marketplace. Health plans had to submit letters of intent, nonbinding indications that they plan to sell on the insurance exchange. While King would not disclose the number his agency has received, he thinks it will be more than enough to create vibrant competition.
Maryland has received 10 letters of intent from insurers that plan to sell on its marketplace, the Maryland Health Connection.
“It looks like we might be adding more carriers than currently sell in the Maryland market,” said Executive Director Rebecca Pearce.
Pearce, who was appointed to her position in September 2011, said the job has involved logistical work that has little to do with health insurance, such as making sure her staff of nine has desks and computers.
“When I personally think about what we need to do to get ready, there’s all this setup,” she said. “You need to physically find space, buy your computers and maybe buy desks. It has taken more time than I ever expected.”
Maryland is also in the process of sifting through applications from marketing firms for a public relations campaign that will launch in the spring and target those most likely to gain coverage.
In order to best appeal to consumers, many states have agonized over the choice of a name. California weighed some quirky options, including Avocado and Healthifornia, before settling on Covered California.
Washington state sifted through about half a dozen names. HealthLink, HealthPlan and HealthConnect were already in use by other entities in the state. One state-specific name, RainierHealth — named for the volcano, Mount Rainier — confused people.
Officials eventually settled on the Washington Health Plan Finder.
“Finding a name was really hard,” said communications director Michael Marchand. “It got to a point where my 8-year-old son, Maxwell, said, ‘Why not call it HealthMax and name it after me?’ ”
As states get closer to the launch date, they find themselves facing issues that might be familiar to any small business.
Oregon’s King is wondering about how he’ll make sure the 150 customer-assistance employees he plans to hire — the people responsible for providing insurance advice — will have health insurance coverage themselves.
“There will be 50 permanent employees and 100 temporary,” he said. “We’ll either have them in the exchange or have benefits provided by the staffing company. That’s something we’re still trying to sort out.”